Jan. 30, 2014

Written by

@BobJordanAPP

TRENTON — Just seven months prior to firing a Sandy housing recovery contractor from a $68 million job, Gov. Chris Christie’s administration was effusive in its praise of Hammerman and Gainer Inc., according to contract documents obtained by NJ Press Media.

The company’s contract bid indicated “a good overview of the tasks required to complete the scope of work,” officials said.

Two members of New Jersey’s congressional delegation on Wednesday called for a federal investigation into the hiring and firing of Hammerman and Gainer Inc. The company was awarded a three-year contract in May but the state terminated the deal in December without public explanation. HGI is being paid a $7 million termination fee. It could not be determined yet what the total payment to HGI was.

The programs run by HGI in New Jersey have been criticized for poor performance, with Sandy victims and advocates airing a laundry list of issues ranging from confusing grant rejections to lack of clarity in how to get help. The complaints are similar to what was heard from Hurricane Katrina victims who applied for rebuilding help though Louisiana’s Road Home Program, which also involved HGI.

Little Egg Harbor resident Teresa Sciacca in a telephone interview called her experience of trying to obtain a $10,000 Homeowner Resettlement Grant “a nightmare” since 4 feet of flood water from Sandy consumed her home. Sciacca said the storm left her and her husband $125,000 in debt.

“I’m not the only one. A lot of people are in the same boat of being delayed and not knowing where they stand. Whenever I bring my paperwork into an assistance office, I can see the frustration on the faces of others who are also trying to get help,” Sciacca said.

Other state contractors are taking over HGI’s work at least temporarily. Lisa Ryan, spokeswoman for the state Department of Community Affairs, declined to say whether a new contract will be awarded to replace HGI.

“The conclusion of our relationship with HGI was coordinated and efficient with no interruption in services following a mutual agreement between the parties as the state transitions into the next phase of the housing recovery programs,” Ryan said.

(Page 2 of 3)

HGI was responsible for distributing $780 million in Sandy aid but only had one competitor when the state took bids for a “Management & Other Related Services of Superstorm Sandy Housing Incentive Program” contract when bidding took place in April, according to documents obtained by the Asbury Park Press.

According to a state evaluation committee report, HGI received the highest technical score and presented the lowest cost. HGI was given the contract not long after its law firm, Capehart Scatchard, donated $25,000 to the Republican Governors Association. Christie is the RGA’s chairman.

HGI officials could not be reached for comment.

The state only allowed five days to accept contract bids, which Adam Gordon, staff attorney for Fair Share Housing Center, called “a key reason” only two bids came in. The second bidder, Tetra Tech, wanted $194 million for the work, nearly three times the price charged by HGI.

“For an extremely complicated job, there was no way a wide range of firms that didn’t have questionable baggage from their work with Hurricane Katrina with could get a bid package together in such a short amount of time,” Gordon said.

Rep. Frank J. Pallone Jr., D-N.J., in an interview said his staff “hears from people just about every day who have questions about New Jersey’s recovery programs and delays for help they’ve encountered.”

Pallone and U.S. Rep. Bill Pascrell Jr., D-N.J., in a letter to U.S. Department of Housing and Urban Development Secretary Shaun Donovan, asked for a closer look and requested that a HUD official be appointed to independently monitor New Jersey’s usage of federal Sandy recovery funds.

"We fought too hard for these federal disaster recovery dollars to stand by while they are recklessly mismanaged,” the letter from Pallone and Pascrell said.

Pallone called the mystery over HGI’s termination and the state’s widely criticized Sandy recovery efforts “the last straws.”

“There have been so many instances where abuse by the state of Sandy recovery money has been raised. It’s endless,” said Pallone, who cited an ongoing HUD inspector general audit of the “Stronger Than the Storm” tourism contract, which Pallone requested, and allegations by Hoboken Mayor Dawn Zimmer that Christie administration officials threatened to withhold city relief funds until she approved a development project.

(Page 3 of 3)

The administration has denied Zimmer’s claims and called the audit of the tourism contract “routine,” but Pallone said, “An audit by the HUD inspector general is never routine. They’re looking into possible problems. That is not part of the regular HUD process.”

The contract documents include a state evaluation committee report that says HGI received the highest technical score and presented the lowest cost of the two bidders.

“The committee has determined that HGI’s quote clearly demonstrated its experience in the industry and its ability to successfully meet the requirements of the (request for quotation) in a cost-effective manner,” said the committee, which noted that HGI operated a Louisiana recovery program after Katrina, but didn’t mention any problems with that program.

Ryan said the administration will “cooperate with HUD in any and all reviews of Sandy CDBG Disaster Recovery programs that are administered to help Sandy-impacted residents and communities recover and rebuild. We are confident any review will show the state continues to manage Sandy recovery funds in the best interests of the people of New Jersey.”

Gordon said there have been no signs that the programs are improving.

“We’re still getting calls from people who don’t know if they’re still on waiting lists, who don’t know if they’re No. 1 or No. 7,000, and who don’t have real clear answers about the whole process,” Gordon said.